Position: Sell Target: $18.00

Shares Out: 75.66M Market Cap: $ 1,820M FYE: Dec Concept: 1. Fragile business model characterized by a lack of any structural competitive advantage and a reliance

on continuous access to capital markets to meet working capital requirements 2. Growth strategy predicated on cheap inventory acquisition and roll-up/consolidation is unsustainable 3. Controversial management structure points to serious misalignment of management compensation and

shareholder interests 4. Aggressive accounting raises questions about the quality of earnings Summary: Diamond Resorts International (“DRII” or “the Company”) represents an attractive short candidate with near-term catalysts. DRII is a “growth story” – the second-largest global timeshare company that has recorded impressive top-line growth in the past three years largely by consolidating distressed resort operators. While the “street” contends that DRII’s strategy of recycling inventory created by customer defaults vs. constructing new properties leads to cash flow generative and sustainable growth, my conversations with DRII customers points to an unsustainable strategy of aggressive increases in HOA assessments to pressure client defaults. Furthermore, DRII’s business model requires continuous access to capital markets to fund its working capital requirements. Additionally, an opaque compensation structure and aggressive accounting practices raise serious questions about the quality of DRII’s earnings. Even after using extremely optimistic long-term revenue growth and EBITDA margin targets, DRII appears to be fully valued, suggesting that DRII is currently priced to perfection. Company Background: Diamond Resorts International (DRII) is the second-largest global timeshare company based on the number of resorts managed and number of owner-families within its network. DRII has over 513k owner-families, second only to industry leader Wyndham that has 907k owner families. The company completed its IPO on July 24, 2013 and has grown its business into a global network of resorts including 93 managed and 210 affiliated resorts. Diamond’s core businesses are managing timeshare resorts, selling timeshares, and providing financing for consumers’ purchases of timeshares. Diamond was created in 2007 when founder Steven Cloobeck acquired the assets of Sunterra several years after that company’s exit from bankruptcy protection. Beginning in 2010, in the immediate wake of the financial crisis, Diamond embarked on an aggressive roll-up strategy and acquired several private timeshare companies that were in or near bankruptcy.

Rec: Diamond Resorts International (DRII: $24.10) Nov. 20, 2014

!Figure'1.'Diamond'Resorts'International'is'the'second'largest'timeshare'company'in'terms'of'resorts'owned'and'number'of'owner'families.'

Source.'Company'presentation'

Investment Thesis: 1. The transition of the timeshare industry from fixed-week, fixed unit purchases to a point system and competition from major hotel companies diminishes the value proposition of DRII product. In the last decade, faced with changing travel patterns of consumers (fewer people taking an annual weeklong vacation and more taking frequent, shorter vacations) and the introduction of a plethora of hotel and airline frequent traveler programs, the timeshare industry embraced product development and product extension strategies. The timeshare product has evolved from a fixed-week, fixed-unit real estate purchase to a travel currency (“points”) that can be redeemed for many different travel products for varying lengths of time, including airfare, hotels, and car rentals. These product extensions mean that today the flexibility of the product offering, more than the physical product itself, is the key to a differentiated product offering. While DRII may have more owner families or managed properties in the timeshare industry than do other major hotel corporations, the company is challenged to match the flexibility of the product offered by Marriott, Starwood, Wyndham, and Hilton. For example, Starwood Vacation Network, Starwood’s timeshare business consists of only 19 properties, but a one-week vacation is equivalent to either 44,000 points (“StarOptions”) to be used at the client’s home resort – the equivalent of about a one-bedroom condo at most resorts – or can be converted into 26,000 points (“Starpoints”) to be used at any of Starwood’s 1100+ hotels. The DRII network of 300 hotels is far smaller than those of major hotel companies, reducing the value proposition of the company’s product to prospective buyers. The data clearly demonstrates the importance of the flexibility of the product offering to customer acquisition costs and the advantage that major hotel corporations have over traditional timeshare resort operators – Marriott Vacations currently averages ~7,000 families per resort owned vs. DRII which averages ~5,500 families per resort owned. The infancy of the vacation ownership industry was marked by scams and gross misrepresentation. This has led to a disproportionate importance of having a trusted brand. Major hotel corporations have brought both credibility and stability to the industry and all of the major multinational hotel corporations now have a vacation ownership business unit. Although DRII may have 500k owner families, it will still have to overcome a smaller share of mind vs. the more established hotel companies when selling to prospective customers.

!Figure'2.'Interest'in'timeshare'ownership'is'on'the'wane'

Source.'Google'Trends'

Given that the industry faces an aging population (the median age of the timeshare owner was 51 years in 2012 according to ARDA) and needs to find means to attract the next generation of timeshare buyer with a plethora of vacation options, DRII has no sustainable competitive advantage vs. major hotel companies who enjoy both a greater share of mind and a more flexible product offering. Additionally, interest in timeshare ownership is on the wane, indicating a short runway for growth for DRII, with multiple companies competing for a share of a shrinking industry.

Figure'3.'Customer'Demographics.'The'timeshare'industry'is'confronted'with'an'aging'owner'base'with'significantly'lower'disposable'incomes'today'than'20'or'30'years'ago.'DRII'will'have'to'face'the'challenge'of'finding'younger'customers'to'replace'timeshare'owners'who'may'choose'to'stop'paying'assessments.'

Source.'Alexa.com'

2. Challenging the bull case - DRII’s “asset light/balance sheet light” inventory acquisition strategy is unsustainable. Bulls contend that DRII’s inventory sourcing model makes the company an attractive investment. Rather than build new inventory, Diamond repurchases very low cost inventory that homeowners’ associations regularly take back from the 3-4% of owners who default on their maintenance fees each year. Bulls claim that this capital efficient strategy boosts free cash flow generation and is very beneficial to margins. Problem with the assertion: a. DRII has been known to use aggressive tactics in its attempts to recover inventory from HOA defaults. “My annual Maintenance Fees started out at $600/week and are now $1300-$1400/week, which have increased by nearly 20% per year ever since Diamond Resorts International took over management of the resort”

- Bruce Wood, deeded owner at Point Poipu, Sugar Grove, Illinois “ DRI sent bills to individual Poipu Point interval owners in or around October 2011, with an initial payment installment, of at least $2,000, due by January 1, 2012. The water assessment was charged in addition to owners’ assessments and fees. Even with the installment payment option, the amount charged was more than double the amount typically invoiced…DRI intends the Water Intrusion Assessment to be used for renovations and upgrades at Point Poipu other than the repair of damage caused by water intrusion.”

- Class Action Lawsuit filed against DRII by owners of the Point Poipu resort on April 6, 2014 alleging misuse of HOA assessments.

The company derives a significant portion of its inventory needs from actively recapturing defaults on HOA. In fact, the company has set up agreements with its managed resorts and the Collections, which allow it to reacquire vacation ownership interests (VOIs) in the event of default. DRII reports significantly higher HOA defaults of 3% - 4% vs. the industry average of 1.5% - 2% (Outlook for timeshare/ vacation ownership, ARDA International Foundation, October 2013). Significant questions have been raised about DRII’s aggressive stance on raising HOA assessments, the most egregious instance of which was levying a $65.8M water intrusion assessment (equivalent to $5893 per one-week interval) on owners at its Point Poipu resort. Raising HOA assessments indiscriminately is not a sustainable strategy and threatens the long-term viability of the DRII “asset light” model. Both long-term revenue growth and margins are adversely affected – the cost of unsold inventory on its books goes up and the overall cost of ownership increases for a timeshare buyer, hurting initial (and upgrade) sales.

Figure'4.'Looking'closer'at'DRII’s'“asset'light”'model.'DRII’s'cash'flow'generative'business'model'that'depends'on'acquiring'low'cost'inventory'from'defaulting'owners'is'underpinned'by'an'aggressive'and'ultimately'unsustainable'strategy'of'indiscriminately'raising'HOA'assessments.'

Source.'Company'presentation'

b. Inventory sourcing mix will have to change if current growth rates are to be sustained. A distinguishing feature of DRII has been its reliance on recycling/reclaiming defaulted (via default on financed notes and HOA dues) inventory for its inventory needs. As sales accelerate, the company will have to transition to more traditional forms of getting inventory to support the growth. In Figure 5, for 2013, the recapture rate of 3.5% (item D in the table) equates to 13.5K week equivalents of inventory (item E) that can support $339mn in VOI sales (item G). We believe that, using the default rate on the originated loan portfolio (item I), this suggests that another 926 week equivalents of inventory (item J) or 9% of inventory needs could come from loan defaults. We believe the HOA recovery mechanism was sufficient to cover all of the inventory needs in 2012, but only a smaller portion in subsequent years. By 2018, the recapture mechanism will provide only about 47% of DRII’s inventory requirements. Therefore as the company grows it will have to build inventory or look for alternate mechanisms by which it can source the remaining inventory requirement, challenging its “asset light” business model.

'

Figure'5.'To'build'or'not.'TwoPthirds'of'DRII’s'2013'inventory'needs'came'from'recaptured'HOA'inventory.'The'strategy'is'unsustainable'if'revenues'are'to'grow,'necessitating'significant'Capex/Acquisition'spend,'threatening'the'bull'thesis.'

Source.'Company'filings,'company'presentations,'my'estimates.'

!3. Challenging the bull case – Consolidation/gradual roll-up opportunity gives DRII a long runway for growth Bulls contend that the highly fragmented timeshare industry offers potential for inorganic growth that would provide recurrent revenue streams as well as a source of low-cost timeshare inventory. Problem with the assertion: DRII’s balance sheet capacity is constrained by its need to access capital markets to fund its consumer finance business. In FY13, DRII’s vacation interest revenue segment comprised 64% of total revenues. VOI sales are essentially accruals and are recognized after a binding contract has been executed - satisfied when Diamond receives a minimum 10% down payment. To monetize these revenues DRII requires securitization markets to function smoothly and access to conduit financing. Any disruption in the capital markets could create working capital shortages in the business and thus constraining DRII’s ability to increase financial leverage to fund large acquisitions. The problem is further compounded because default rates spike during economic slowdowns, reducing management and member services revenues at the same time vacation interest revenue declines, further necessitating the need to maintain prudent levels of leverage. The company’s need to access capital markets to fund its working capital has severely stressed the company’s viability during past economic slowdowns. DRII (formerly Sunterra) traced its roots to the early 1990s when three partners purchased the Cypress Pointe Resort in Lake Buena Vista, Florida. In 1996, KGK Resorts was formed, uniting nine of the LPs or LLCs formed by the company’s founders. The company changed its name to Signature Resorts and completed its IPO in August 1996. Following its IPO, Signature expanded at an extremely rapid pace, going from nine resorts to 81 resorts within a year or so of the IPO. The stock performed very well and hit a peak of $32 in October 1997. In 1998 Signature changed its name to Sunterra Corporation. Two years later, problems related to Sunterra’s rapid growth began to emerge. The company announced a large write-down in early 2000 and then reported a huge loss in 1Q’00. In May 2000 Sunterra defaulted on its debt, filed for Chapter 11 and was delisted from the NYSE. Sunterra restructured under bankruptcy protection and exited chapter 11 in July 2002. The company returned to profitability in 2003 and by late 2004 it had again begun acquiring resorts. Sunterra was unable

to withstand a second economic slowdown, and in 2006 it was delisted from NASDAQ after its auditors resigned and withdrew their certification of Sunterra’s financial statements. In March 2007, Diamond Resorts acquired Sunterra for $16 per share. While poor management may have contributed to the woes of DRII’s predecessor companies, the company’s need to constantly access capital markets to fund its working capital means that the company will continue to be threatened by economic downturns.

!DRII has already used the proceeds from its Initial Public Offering to fund acquisitions limiting future growth through consolidation. DRII has already utilized the net proceeds of $210 million from its IPO to: 1. Repay the PMR acquisition loan - $56 million 2. Repay the Tempus acquisition loan - $50 million 3. Acquire the PMR Service companies - $48 million 4. Repurchase warrants from Guggenheim - $10 million 5. Repurchase a portion of its notes payable. This leaves the company with a limited war chest to fund future acquisitions.

Figure'6.'The'first'timeshare'“rollup”.'DRII'has'ramped'up'acquisition'activity'over'the'last'three'years,'but'given'the'working'capital'issues'inherent'in'the'timeshare'business'model,'adding'leverage'to'the'balance'sheet'to'fund'further'acquisitions'leaves'the'business'vulnerable'to'economic'slowdowns.'

Source.'Company'presentations.'

4. Complex G&A structure and related party transactions raise serious questions about alignment of management compensation with shareholder interests. Diamond has a controversial senior management structure. Diamond’s Chairman, CEO, CFO and about 40 other officers and employees are not directly employed by or compensated by Diamond. Instead, these individuals work for and are paid by an outside entity called Hospitality Management and Consulting Services, LLC, or HM&C. Each of the employees of HM&C devotes her full business time and attention to Diamond. Diamond’s Chairman, Steven Cloobeck, beneficially owns HM&C. HM&C is an external management company that provides services to Diamond. Diamond has a management agreement with HM&C and pays it for providing these services to the HOAs and the company. Under this agreement, HM&C earns an annual management fee for providing HOA management services, an annual management fee for providing corporate management services, and an annual incentive fee payment based on performance metrics set out by Diamond’s board, subject to certain minimums. Diamond also reimburses HM&C for certain expenses. Diamond paid HM&C $16.9 million in 2011 and $17.9 million in 2012 in total management fees, incentive fees, and reimbursements under the HM&C agreement. Diamond also provides various perks to certain employees of HM&C, including personal use of company planes and health benefits.

The HM&C contract allows a substantial portion of the fees it earns to be allocated out to, and paid for by, the HOAs. In fact, a substantial majority of the fees generated by HM&C is allocated out to the HOAs and paid by the owners as part of their annual maintenance fees. As such, they are not running through Diamond’s SG&A expenses. What are the incentives to top management for setting up a complex compensation structure through HM&C? I believe the opaque compensation structure reflects management’s lack of confidence in the stability of the consumer finance and vacation interest revenue streams. A compensation structure whereby management elects to remunerate itself only through member services revenues underscores the instability inherent in DRII’s business model. If management does not believe that revenues from the securitization of receivables can be relied on to provide a stable income stream, why should shareholders? Numerous related party transactions also raise questions about the prudence of DRII compensation practices. Since FY2011, DRII has paid upwards of $41.6M to companies directly affiliated with senior management (as outlined in the table below), raising questions about the propriety of its compensation practices.

Figure'7.'Related'party'transactions.'Since'FY2011,'DRII'has'paid'more'than'$41M'to'companies'directly'affiliated'with'top'management.''

Source.'Company'filings.'

4. Aggressive accounting practices raise questions about the quality of DRII’s earnings. “We continue to believe that your current presentation of Adjusted EBITDA as a performance measure is misleading to investors due to the exclusion of vacation interest costs. Please revise your filing to remove the adjustment for vacation interest costs when presenting this performance measure.”

- SEC letter to Diamond Resorts, May 9, 2013 Adjusted EBITDA for DRII is different from peers In its calculation of adjusted EBITDA, DRII backs out costs related to vacation interest cost of sales (i.e., timeshare product cost). Under the relative sales value, timeshare developers have to make significant estimates which are subject to uncertainty, and if the relative cost economics improve/decrease for a pool of inventory, it can cause significant volatility in outcomes. DRII backs out the costs here as the share of inventory coming from

distress or HOA recapture outweighs the amount of developed inventory for DRII. I think the treatment leaves out a key cost (the cost of sourcing inventory, even if sourced from HOA defaults, this is not zero) in the calculation of adjusted EBITDA, and makes EBITDA margin among peers non-comparable. I believe that costs incurred in the acquisition of VOI inventory can be a suitable subtraction from the reported adjusted EBITDA to get a better representation. A significant portion of DRII’s costs are capitalized implying that any slowdown in growth would have a larger than anticipated impact on earnings The idiosyncrasies of timeshare accounting provide DRII with significant discretion in capitalizing numerous expenses including inventory-sourcing costs and loan origination costs. Often DRII has been aggressive in capitalizing expenses – the company capitalizes routine expenditures such as legal, title, and trust fees involved in inventory acquisition. Any slowdown in revenue growth would thus disproportionately affect earnings as past accruals are amortized and charged against a smaller revenue base. Valuation I have relied on a discounted cash flow model to handicap the risks to my short thesis. My DCF assumptions include optimistic revenue growth estimates for 2014 to 2018 and significant improvements in EBITDA margin.

The model employs an 8.0% discount rate, and a long-term free cash flow growth rate of 1.5%, which is reasonable given industry dynamics. Cash flows have been discounted using a mid-year timescale and a 30% tax rate. I consider this to be a best-case scenario for the business, incorporating extremely optimistic growth and margin improvement forecasts, and yet the implied valuation target is still only $18/share indicating that the stock is fully valued.

Financial Models

EST EST EST

(data in thousands, except per share) 1Q 2Q 3Q 4Q FY'11 1Q 2Q 3Q 4Q FY'12 1Q 2Q 3Q 4Q FY'13 1Q 2Q 3Q 4Q FY'14 FY'15Revenues:Management and member services 23,295 24,208 25,992 25,811 99,306 27,280 28,295 29,999 29,363 114,937 31,587 31,107 33,610 34,934 131,238 38,224 39,219 37,795 35,686 150,924 166,016Consolidated resort operations 6,946 7,242 7,601 8,104 29,893 8,534 8,627 8,361 8,234 33,756 8,620 8,519 9,326 9,047 35,512 8,723 9,621 10,481 10,238 39,063 42,970Vacation interest, net 38,943 48,717 55,712 51,387 194,759 54,572 64,874 83,318 90,334 293,098 91,668 110,439 123,708 138,798 464,613 105,897 130,005 143,180 150,189 529,271 583,521Interest 9,829 9,801 14,650 13,005 47,285 13,656 12,512 12,886 14,152 53,206 13,255 13,607 14,297 15,885 57,044 15,674 16,206 17,130 8,052 57,062 88,071Other 8,519 3,819 3,495 3,945 19,778 4,908 7,136 8,148 8,479 28,671 8,322 10,201 10,661 12,197 41,381 12,707 13,963 13,379 10,022 50,071 55,078Total Revenues 87,532 93,787 107,450 102,252 391,021 108,950 121,444 142,712 150,562 523,668 153,452 173,873 191,602 210,861 729,788 181,225 209,014 221,965 214,187 826,391 935,656Management and member services 6,127 5,688 6,719 8,591 27,125 8,275 8,460 8,862 9,733 35,330 50,359 8,765 9,408 9,955 35,330 60,775 5,881 8,549 -29,928 45,277 49,805Advertising, sales, and marketing 28,436 33,197 34,488 32,596 128,717 34,819 40,218 49,554 53,774 178,365 7,722 60,595 70,714 76,783 178,365 7,771 71,107 82,308 108,742 269,928 297,596Vacation interest carrying cost, net 8,560 7,347 4,156 21,268 41,331 9,272 9,176 8,226 9,689 36,363 9,779 10,750 10,154 12,206 36,363 8,947 6,729 5,162 60,960 81,798 145,625Loan portfolio 2,618 2,024 2,172 3,939 10,753 2,802 2,383 2,446 1,855 9,486 2,505 2,754 2,296 2,076 9,631 2,490 2,359 1,400 14,756 21,005 24,146Other operating 133 862 1,023 -720 1,298 706 1,807 2,454 3,540 8,507 368 2,238 3,912 5,588 12,106 5,537 5,266 5,847 -6,065 10,585 11,670General and administrative 19,053 18,669 21,074 21,616 80,412 20,761 22,201 27,976 28,077 99,015 22,800 21,698 61,114 40,313 145,925 24,192 23,264 26,747 91,075 165,278 116,704Depreciation and amortization 3,170 3,142 3,853 3,801 13,966 3,805 4,369 5,205 5,478 18,857 6,254 6,075 7,583 8,273 28,185 8,061 8,269 8,271 10,521 35,122 39,765Interest expense 18,372 19,908 22,102 21,628 82,010 21,931 23,219 24,808 26,199 96,157 24,842 24,794 20,925 18,065 88,626 16,615 17,383 11,294 -20,874 24,418 24,716Loss on extinguishment of debt 0 0 0 0 0 0 0 0 0 0 0 0 13,383 2,221 0 0 46,807 0 -46,807 0 0Impairments and other write-offs 83 240 693 556 1,572 -11 0 401 619 1,009 79 0 1,200 308 1,587 7 35 11 0 0 0Gain on disposal of assets (9) (363) (76) (260) (708) (72) (24) (122) (387) (605) (50) (38) (585) (309) (982) (4) (149) 224 - - - Gain on bargain purchase of business combinations - - (34,183) 19,854 (14,329) (51) (22,698) 115 2,024 (20,610) - 30 (2,756) (153) (2,879) - - - - - - Total costs and expenses 92,778 92,139 70,495 134,823 390,235 117,550 89,501 154,017 163,267 524,335 150,741 155,506 225,555 194,734 726,536 155,168 211,088 175,505 189,273 730,910 789,547

Pre-tax income(loss) (5,246) 1,648 36,955 (32,571) 786 (8,600) 31,943 (11,305) (12,705) (667) 2,711 18,367 (33,953) 16,127 3,252 26,057 (2,074) 46,460 24,914 95,481 146,109

Tax (GAAP) 1,473 (891) (646) (9,453) (9,517) 975 (14,668) 340 (957) (14,310) 438 411 (7,626) 12,554 5,777 12,047 657 20,156 8,720 33,418 51,138

Net Income (loss) (6,719) 2,539 37,601 (23,118) 10,303 (9,575) 46,611 (11,645) (11,748) 13,643 2,273 17,956 (26,327) 3,573 (2,525) 14,010 (2,731) 26,304 16,194 62,063 94,971

Diluted GAAP EPS $0.04 $0.33 ($0.37) $0.05 ($0.04) $0.18 ($0.04) $0.34 $0.21 $0.81 $1.18

Diluted Shares 54,058 54,058 70,959 75,741 63,704 75,839 75,456 77,418 77,418 76,533 80,359

Net Income - (before extraordinary items) GAAP (5,246) 1,648 36,955 (32,571) 786 (8,600) 31,943 (11,305) (12,705) (667) 2,711 18,367 (33,953) 16,127 3,252 26,057 (2,074) 46,460 24,914 95,481 146,109 Add: Corporate Interest expense 14,317 15,530 16,453 17,086 63,386 17,011 18,453 20,254 21,704 77,422 20,764 20,688 16,658 14,105 77,422 13,246 13,827 7,429 21,704 24,418 24,716 Depreciation and Amortization 3,170 3,142 3,853 3,801 13,966 3,805 4,369 5,205 5,478 18,857 6,254 6,075 7,583 8,273 28,185 8,061 8,269 8,271 10,521 35,122 39,765 Vacation interest cost of sales 67 (5,681) 1,854 (5,935) (9,695) 8,231 (7,834) 16,778 14,975 32,150 17,846 9,000 18,605 11,244 32,150 12,902 15,462 16,476 (2,498) - - Impairments and other non-cash write-offs 83 240 693 556 1,572 (11) - 401 619 1,009 79 - 1,200 308 1,587 7 35 11 - - - Gain on the disposal of assets (9) (363) (76) (260) (708) (72) (24) (122) (387) (605) (50) (38) (585) (309) (982) (4) (149) 224 - - - Gain on bargain purchase from business combination - - (34,183) 19,854 (14,329) (51) (22,698) 115 2,024 (20,610) - 30 (2,756) (153) (2,879) - - - - - - Amortization of loan origination costs 646 662 718 736 2,762 707 788 896 904 3,295 1,182 1,286 1,408 1,543 3,295 2,064 2,147 2,380 904 - - Amoritzation of portfolio discounts (89) (74) 138 825 800 (955) 60 174 (138) (953) 48 19 365 104 (953) (109) 16 57 (138) - - Stock-based compensation - - - - - - - - - - - - 38,495 2,038 - 4,696 4,166 3,336 - - - Loss on extinguishment of debt - - - - - - - - - - - - 13,383 2,221 - - 46,807 - - - - Adjusted EBITDA 12,939 15,104 26,405 4,092 58,540 20,065 25,057 32,396 32,474 109,898 48,834 55,427 60,403 55,501 141,077 66,920 88,506 84,644 55,407 155,021 210,590

Total Revenue 24% 29% 33% 47% 34% 41% 43% 34% 40% 39% 18% 20% 16% 2% 13% 13%Total costs and expenses 27% -3% 118% 21% 34% 28% 74% 46% 19% 39% 3% 36% -22% -3% 1% 8%Pre-Tax Income 64% 1838% -131% -61% -185% -132% -43% 200% -227% -588% 861% -111% -237% 54% 53%Net Income 43% 1736% -131% -49% 32% -124% -61% 126% -130% -119% 516% -115% -200% 353% 53%

November 20, 2014

Diamond Resorts InternationalIncome Statement

Adjusted EBITDA Calculations

2011 2012 2013

yr/yr growth rates

2014

!!!

!

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4QCash and Equivalents 19,897 19,897 19,384 19,897 18,191 17,876 18,247 21,061 26,204 18,847 29,876 35,945 75,776 117,882 181,923 267,162Mortgages and contracts receivable 283,302 283,302 297,084 283,302 280,091 283,242 298,449 312,932 320,967 335,076 377,513 405,454 411,250 428,863 464,400 613,951Unsold vacation interest, net 256,805 256,805 246,445 256,805 256,525 320,712 330,088 315,867 300,488 307,613 301,709 298,110 293,653 292,248 277,066 356,272Other assets 68,109 68,109 66,203 68,109 66,343 109,109 105,959 112,498 108,312 104,960 231,125 198,632 193,633 188,645 183,493 177,972TOTAL ASSETS 833,219 833,219 833,923 833,219 882,480 979,759 962,247 993,008 1,053,803 1,073,472 1,232,205 1,301,195 1,389,148 1,431,323 1,478,908 1,759,470Senior secured notes 415,546 415,546 415,328 415,546 415,771 416,003 416,243 416,491 416,747 417,012 367,642 367,892 368,150 0 0 0Securitization notes and Funding facilities 415,546 415,546 415,328 415,546 415,771 416,003 416,243 416,491 416,747 417,012 367,642 367,892 368,150 0 0 0Notes Payable 71,514 71,514 65,590 71,514 71,400 129,941 125,315 137,906 137,545 132,647 22,866 23,150 25,407 5,074 2,414 7,400Other liabilities 212,466 212,466 187,761 212,466 274,273 275,077 259,250 280,908 319,641 311,679 283,620 288,669 342,699 307,926 271,468 326,881TOTAL LIABILITIES 833,219 833,219 833,923 833,219 882,480 979,759 962,247 993,008 1,053,803 1,073,472 1,232,205 1,301,195 1,389,148 1,431,323 1,478,908 1,759,470Member capital 152,247 152,247 152,294 152,247 152,239 152,238 152,212 155,568 155,568 155,558 755 755 755 755 757 757Accumulated deficit (251,077) (251,077) (227,959) (251,077) (260,652) (214,041) (225,686) (237,434) (235,161) (217,205) (243,532) (239,959) (225,949) (228,680) (202,376) (177,896) Accumulated other comprehensive loss (18,372) (18,372) (17,930) (18,372) (16,356) (18,069) (16,771) (16,733) (19,465) (19,685) (18,497) (16,177) (15,763) (14,586) (17,475) (17,475) Total equity (117,202) (117,202) (93,595) (117,202) (124,769) (79,872) (90,245) (98,599) (99,058) (81,332) 200,459 207,813 226,969 230,199 258,773 283,253 TOTAL LIAB. & EQUITY 833,219 833,219 833,923 833,219 882,480 979,759 962,247 993,008 1,053,803 1,073,472 1,232,205 1,301,195 1,389,148 1,431,323 1,478,908 1,759,470

Diamond Resorts International Balance Sheet

20132011 2012 2014